George v. Starbucks Corporation

Background

This proposed class action concerned allegations by Starbucks customers that the company violated New York General Business Law §§ 349 and 350. Section 349 prohibits deceptive business practices, and Section 350 prohibits false advertising. The customers alleged that Starbucks marketed itself as a high-end coffee company offering quality products and a welcoming store environment, using phrases such as “the finest whole bean coffees,” “Best Coffee for the Best You,” and “PERFECT.”

The customers also alleged that several New York Starbucks locations had flies, cockroaches, fruit flies, and silverfish. According to the amended complaint, employees used Hot Shot No-Pest 2 Strips, which release the pesticide 2,2-dichlorovinyl dimethyl phosphate into the air. The complaint alleged that the strips were placed near air vents, inside pastry trays, and under store counters, despite warnings against using them in food-service establishments. The customers did not allege that they became ill.

Legal standard

On a motion to dismiss, the court assumes the complaint’s factual allegations are true and draws reasonable inferences for the nonmoving party. The complaint must contain enough facts to make the claimed right to relief plausible.

To state a claim under New York General Business Law §§ 349 or 350, a plaintiff must allege consumer-oriented conduct that was materially misleading and caused injury. Whether conduct is materially misleading is judged objectively: the question is whether it would likely mislead a reasonable consumer acting reasonably under the circumstances.

Court’s analysis

The court held that most of the challenged advertising was “puffery,” meaning vague, subjective praise that cannot be proven true or false. Statements that Starbucks sold the “best coffee” or offered “PERFECT” products were expressions of opinion, not factual claims likely to mislead reasonable consumers.

The court identified one statement that could have supported a deception claim if false: Starbucks’s statement that its baked goods contained “no artificial dyes or flavors.” But the court held that the pesticide alleged in the complaint was not an artificial dye or flavor. It also held that a reasonable consumer would not understand that statement to communicate anything about whether Starbucks used pesticides in its stores.

The customers argued that Starbucks’s overall branding, viewed as a whole, implied that it sold premium products made with the best ingredients. The court rejected that argument, explaining that the cases cited by the customers involved advertising campaigns that conveyed specific, verifiable facts. The customers did not allege that Starbucks’s advertising communicated, directly or indirectly, specific information about its products or pesticide practices.

Leave to amend and disposition

The court noted that the customers had already amended their complaint after Starbucks filed an earlier motion to dismiss and did not request another opportunity to amend. The court also found that further amendment would be futile because none of Starbucks’s advertising statements conveyed or implied information about pesticide use.

The court granted Starbucks’s motion to dismiss and dismissed the amended complaint with prejudice. In its conclusion, the court stated that New York’s laws prohibit deceptive practices, not merely alleged unhygienic conditions. It dismissed all claims with prejudice and directed the Clerk of Court to close the case.